Central bank increases rediscount rates

08:38, December 30, 2010      

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China raised rediscount and relending rates in which financial institutions borrow from the central bank on Sunday.

The rediscount rate was raised by 45 basis points to 2.25 percent and the one-year relending rate was increased by 52 basis points to 3.85 percent, the People's Bank of China has said.

Analysts said banks rarely resort to central bank relending or rediscounting for funds.

The central bank announced on Christmas Day the second increase in its lending and deposit rates since mid-October.

China has shifted its monetary policy from "relatively loose" to "prudent" to tame inflation. China's inflation hit 5.1 percent in November, a 28-month high.

Source: Shanghai Daily
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